Welfare reform and the way benefits will be

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Changes, changes, changes…

All sorts of things ’emerging’ now. Lord Freud answered a question during the Lords’ committee stage yesterday to say that support for mortgage interest (SMI) will not be paid to those in full time work. The two year limit will also continue for those not in work. A lot of the seamlessness of design there for those working variable hours. There was no detail about the decision factor; 16 hours or 24 times minimum wage? The Impact Assessment talks about the conditionality hours; 35 for a single person, and a minimum wage figure for lone parents with young children. Still a simple system then.

There was a reference by Lord Freud to ‘the illustrative draft regulations that we have sent out in recent weeks show that help will continue for homeowners as now’. Has anyone seen these draft regulations? (got a copy – thanks)

The new version of the UC impact statement includes alterations to the earnings disregard amounts and rules, because the original figures assumed Council tax Benefit as part of UC, including the introduction of an earnings disregard for single people.

As the disregards will still be reduced to take account of the housing help being received, there will be a really complex better-off calculation when SMI stops, because of work or even perhaps the two years period, when the SMI income drop is compared with the increase in earnings disregards and, potentially, a decrease in non-dependant deductions. For some people with small mortgages that may be beneficial (will people be penalised for not telling the department about a mortgage when they claim because the one and a half times SMI penalty costs them more than it helps?).

We’re told there will be two adult disability elements but also that there will now two disabled child elements as well.

I’ve obviously got a fair bit of work to do on the Future Benefits Model so, for the meantime, treat the figures in the current version of the paper as being pretty useless. Sorry about that.

ps. One change in the latest version of the impact statement is that ‘premia’ has been replaced by ‘premiums’. Another classicist civil servant sent into exile?